I am so sorry that this has happened. Do what you must to keep your own sanity.

I would call her bluff. If she doesn't come to visit w/the children during the holidays, I would advise the children that she's very busy and unable to come after all. They can call, facetime or email/text her to wish her happy holidays. I would not allow her to bully you into doing something you aren't ready to do. The kids will be disappointed, but you can't allow her to bully you....

I am not at all surprised that she wants your counter proposal on divorce. She doesn't want to do mediation because in her mind, it takes too long and she wants her divorce yesterday. Advise her that the discussion on the counter proposal will not be discussed during Christmas, but that you will review everything after the holiday.

Does her sibling live w/you and is her name on the deed? If not, she doesn't have the authority to come into your home and remove your belongings.

I am so sorry she's using the holiday to hold you and your children hostage. Stop, breathe and do not do anything when you are upset and/or angry. You have to be in a calm place to deal with this latest mess.

just my two cents.

Sit quietly, the answers will reveal themselves when you least expect them to.
The past is gone, the present is a gift and you need to focus on today, allow the future to reveal itself when it is ready.